Soft Residential Market

The real estate market in Singapore has become what some property experts call soft. It would seem as though the market has slowed since the Government brought extra expenses into play that investors did not have to consider in 2009. Additional Buyers Stamp Duty which is known as the (ABSD), The Seller’s Stamp Duty which is referred to as (SSD) and Loan-to-Value, referred to as (LTV). The reasons were to stop speculation, what this speculation was about, we are not sure, however another reason the Government say that they implemented these changes was because of hot money (which is likely dirty money or money Lorong 1 Toa Payoh Condo from the proceeds of crime) ending up as part of Singapore’s economy. These changes have affected the real estate market The Terrace EC in the last few years.

The Terrace EC Residential Market

In more recent times there has been news coming out of Singapore relating to residential properties. These properties have been sold recently at a significant loss. Is this the start of the market dropping. Is there something to worry about. To get a better picture of this, take a look at the prices and volume trends from 2009 to the present.

If you look at Chart 1 above, sales volumes for The Terrace EC has hit it lowest point with activity in the market slowing down as well. The heydays of 2012 are long gone. Activity has slowed come 2014. the number of sales a lot less than what we saw in 2009. Sub-sales are sale of units or flats from one owner to another buyer before the The Terrace EC was complete.

Terrace EC Kheng Leong

If we look at table 1, it is no shock to see that the increase in price has stopped, the high point being in Feb 2013. Prices might be starting to stablize in The Terrace EC, we are not seeing many signs that things are getting better.

Looking at the long term prices way back to 1995 it is even more clear that the trough we saw in 2008, was because peak prices were reach in 1997. Is it possible to forecast a decline given prices are low? What can we expect in 2017 – 2018? Investors will be hoping for these levels, but can we expect to see the market drop even more. And what are the important things to keep in mind?

To analyze if the current prices are supported by strong evidence, we can look at how the rental market is performing in the price index on table 2.

Punggol The Terrace

The number of empty apartments and rental homes that are available is at around 7.2%, recorded by and analyzed by URA for the first quarter. The properties that were added in 2009-2011, have inflated the figures recorded by the URA. When there are a lot of properties on the market the rent market drops too. Owners of The Terrace EC are keen to rent their properties and will drop the rents to keep the tenant there. Given the statistics recorded in Jan 2013, this could be a sign of weaker rents to come.

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